Trump’s DOJ Launches Criminal Probe: Fed Chair Powell Under Fire

Paul Riverbank, 1/12/2026Fed Chair Powell faces DOJ probe—high-stakes clash over money, politics, and central bank independence.

Tensions have been brewing between the Trump administration and the Federal Reserve for some time, but Friday brought a sharp escalation. Federal prosecutors served grand jury subpoenas to Fed headquarters, confirming a swirling rumor: Powell’s stewardship of a costly building renovation in Washington had drawn the scrutiny of the Department of Justice. The project, initially pitched at $1.9 billion back in 2021, has since grown by over half a billion dollars. According to Powell and senior staff, the price hikes are a familiar cocktail: aging infrastructure, asbestos, tighter security, plus that stubborn post-pandemic inflation. They’ve been careful to document and publish the breakdown of rising expenses, but that transparency seems to have done little to blunt suspicion.

For now, federal officials are mum about the evidence or the broader scope of the inquiry, offering little beyond a commitment to “protect taxpayer dollars.” Jeanine Pirro, now helming the U.S. attorney’s office in D.C. and known for her vocal alignment with President Trump, quietly greenlit the grand jury last November. This is not the usual pace or playbook for investigating such a storied institution.

What pushed Powell to break his silence so dramatically? In his weekend address, he barely mentioned the renovation. Instead, he cut to the uncertainty at the heart of the matter. “This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress’s oversight role,” he said, his voice bearing an undercurrent of frustration. He characterized the probe as camouflage—a transparent attempt to pressure the Fed into shaping interest rates with an eye toward political favor, not economic necessity.

That assertion is no small provocation. The Fed’s independence is sacrosanct in American policy circles, an article of faith not just for economists but for investors and ordinary citizens whose livelihoods depend on steady hands at the monetary wheel. Powell knows the stakes: inflation is still running hotter than the Fed hopes, and jobs data—once roaring—has lately lost some of its bite. Every interest rate move potentially swings the fortunes of borrowers, savers, job-seekers, and homeowners.

Presidential frustration with the Fed isn’t new, but the present confrontation is unusually pointed. Trump, never shy about his impatience with rate decisions, made clear to The New York Times that he has names in mind—replacements, should Powell’s tenure end prematurely (his current term runs until May 2026). For the White House, the legal offensive signals more than just a financial audit; it’s a broader challenge to the postwar norm that has largely insulated monetary policy from Oval Office intrigue.

Look closely, and what emerges is less about construction budgets than about the country’s constitutional architecture. How far can a president, through appointees and prosecutors, push into the domain of central bankers? What does it mean if the price of public service is a looming threat of criminal liability—over a project that’s been discussed, re-discussed, and poured over in public hearings? These questions echo through the marble halls of Constitution Avenue, growing louder as legal filings mount.

For now, Powell says he’ll stay put, promising to serve the “American people” with “integrity.” But inside the Fed and beyond, anxiety is mounting. History may one day reduce this to a footnote—a mere quarrel over construction and cost overruns. Yet the present moment feels charged, as if testing the tensile strength of norms that, until now, many assumed unbreakable.

— Paul Riverbank

On a humid Sunday evening, an odd sort of message flickered across the wires—a message from Jerome Powell, chair of the Federal Reserve, who, by temperament and tradition, tends to avoid the limelight. Yet there he was, speaking directly to Americans with a quiet forcefulness that caught the attention of even casual observers. The backdrop? A federal criminal investigation—targeted not at some obscure corner of the central bank but at Powell himself, the nation’s top economic policymaker.Tensions have been brewing between the Trump administration and the Federal Reserve for some time, but Friday brought a sharp escalation. Federal prosecutors served grand jury subpoenas to Fed headquarters, confirming a swirling rumor: Powell’s stewardship of a costly building renovation in Washington had drawn the scrutiny of the Department of Justice. The project, initially pitched at $1.9 billion back in 2021, has since grown by over half a billion dollars. According to Powell and senior staff, the price hikes are a familiar cocktail: aging infrastructure, asbestos, tighter security, plus that stubborn post-pandemic inflation. They’ve been careful to document and publish the breakdown of rising expenses, but that transparency seems to have done little to blunt suspicion.For now, federal officials are mum about the evidence or the broader scope of the inquiry, offering little beyond a commitment to “protect taxpayer dollars.” Jeanine Pirro, now helming the U.S. attorney’s office in D.C. and known for her vocal alignment with President Trump, quietly greenlit the grand jury last November. This is not the usual pace or playbook for investigating such a storied institution.What pushed Powell to break his silence so dramatically? In his weekend address, he barely mentioned the renovation. Instead, he cut to the uncertainty at the heart of the matter. “This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress’s oversight role,” he said, his voice bearing an undercurrent of frustration. He characterized the probe as camouflage—a transparent attempt to pressure the Fed into shaping interest rates with an eye toward political favor, not economic necessity.That assertion is no small provocation. The Fed’s independence is sacrosanct in American policy circles, an article of faith not just for economists but for investors and ordinary citizens whose livelihoods depend on steady hands at the monetary wheel. Powell knows the stakes: inflation is still running hotter than the Fed hopes, and jobs data—once roaring—has lately lost some of its bite. Every interest rate move potentially swings the fortunes of borrowers, savers, job-seekers, and homeowners.Presidential frustration with the Fed isn’t new, but the present confrontation is unusually pointed. Trump, never shy about his impatience with rate decisions, made clear to The New York Times that he has names in mind—replacements, should Powell’s tenure end prematurely (his current term runs until May 2026). For the White House, the legal offensive signals more than just a financial audit; it’s a broader challenge to the postwar norm that has largely insulated monetary policy from Oval Office intrigue.Look closely, and what emerges is less about construction budgets than about the country’s constitutional architecture. How far can a president, through appointees and prosecutors, push into the domain of central bankers? What does it mean if the price of public service is a looming threat of criminal liability—over a project that’s been discussed, re-discussed, and poured over in public hearings? These questions echo through the marble halls of Constitution Avenue, growing louder as legal filings mount.For now, Powell says he’ll stay put, promising to serve the “American people” with “integrity.” But inside the Fed and beyond, anxiety is mounting. History may one day reduce this to a footnote—a mere quarrel over construction and cost overruns. Yet the present moment feels charged, as if testing the tensile strength of norms that, until now, many assumed unbreakable.— Paul Riverbank